Automated Liquidity Provision

Automated Liquidity Provision in cryptocurrency refers to the practice of using automated systems to provide liquidity for trading pairs on decentralized exchanges. Liquidity provision involves depositing funds into a pool that traders can buy and sell against. The automated aspect refers to the use of smart contracts to facilitate this process without the need for manual intervention.

These automated systems can help ensure that there is sufficient liquidity in the market for traders to execute their trades quickly and efficiently. By providing liquidity, users can earn fees in the form of trading commissions, as well as potential rewards from the protocol.

Overall, Automated Liquidity Provision plays a crucial role in the functioning of decentralized exchanges by facilitating the trading of assets without the need for a centralized intermediary. It helps create a more efficient and liquid market, benefiting both traders and liquidity providers.

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